Nine Months to Financial Fitness – Motivations

Here’s a story I wish someone had shared with me a long time ago. It’s the hypothetical story of twins. Let’s make them young women with a passion for fashion, food, and world travel. (Why fashion, food, and world travel? ‘Cause they’re costly.) Both girls have the same taste, the same wants, and since they are twins, they like to have the same things. They are only different on the timing of their purchases.

Twin 1 (Ms. C.C. Shopper) can’t stand to wait for anything so she buys first and think later. Most of the time, she doesn’t have the money right away so she uses her credit cards and pays for her purchases a couple of months later down the line. Of course, she ends up paying premium prices AND interest on her credit cards.

Twin 2 (Ms. Savy Shopper) can’t stand the thought of giving her money away to credit card companies, so she saves her money in an interest bearing savings account until she has enough to buy what she wants. Of course, by the time she has enough money, the item is usually on sale, so she gets a great deal. She also gets to accumulate interest on the left-overs in her savings account.

Now, C.C. feels bad for her twin because Savy always seems to be a bit behind the fashion. Savy feels a bit sad too, but she figures it’s a small price to pay to stay out of debt.

Graduation day comes and they both decide to head off to Europe to celebrate. C.C. puts the entire $3000 trip on her credit card, really pushing her limits to the max while Savy pulls out the savings that’s been growing for the last 4 years. She is mildly surprised to find that she still has a bit of money left over. They both have a great trip and come back to start their working lives.

What’s the score so far? Well, both girls have the EXACT same STUFF because they enjoy buying the same things. However, C.C. is already burdened with thousands of dollars in debt while Savy already has a small nest egg started.

The decision that you have to make for yourself is: are you going to spend first and pay later or are you going to save first?

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